Accounting, Analysis, and Principles (Part Level Submission) In preparation for significant expansion of its international operations, Sunland Co. has adopted a plan to gradually shift to the same accounting methods as used by its international competitors. Part of this plan includes a switch from LIFO inventory accounting to FIFO (recall that IFRS does not allow LIFO). Sunland decides to make the switch to FIFO at January 1, 2020. The following data pertains to Sunland's 2020 financial statements (in millions of dollars). Sales Inventory purchases 12/31/20 inventory (using FIFO) Compensation expense $640 440 670 26 All sales and purchases were with cash. All of 2020's compensation expense was paid with cash. (Ignore taxes.) Sunland's property, plant, and equipment cost $490 million and has an estimated useful life of 10 years with no salvage value. Sunland Co. reported the following for fiscal 2019 (in millions of dollars): SUNLAND CO. BALANCE SHEET AT DECEMBER 31, 2019 2019 2018 Cash $ 446 $ 290 Common stock Inventory 590 570 Retained earnings Property, plant, and equipment 490 490 Accumulated depreciation (98) (49) Total assets $1,428 $1,301 Total equity 2019 $ 590 838 2018 $ 590 711 $1,428 $1,301 SUNLAND CO. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019 2019 Sales $ 590 Cost of goods sold (390) Depreciation expense (49) Compensation expense Net income 121 Summary of Significant Accounting Policies Inventory: The company accounts for inventory by the LIFO method. The current cost of the company's inventory, which approximates FIFO, was $69 and $59 higher at the end of fiscal 2019 and 2018, respectively, than those reported in the balance sheet. (a) Prepare Sunland's December 31, 2020, balance sheet and an income statement for the year ended December 31, 2020. In columns beside 2020's numbers, include 2019's numbers as they would appear in the 2020 financial statements for comparative purposes. (List Assets in order of liquidity.) SUNLAND CO. Balance Sheet December 31, 2020 2020 2019 Cash 446 $ 290 Inventory Property, Plant and Equi Accumulated Depreciatie Total Assets Common Stock Retained Earnings Total Equity SUNLAND CO. Income Statement 2020 2019 Sales Cost of Goods Sold Depreciation Expense Compensation Expense Net Income / (Loss) Attempts: 0 of 1 used